The Federal Communications Commission chair has declared that the thresholds of cable penetration have exceeded the minimum necessary for FCC regulation and intends on bringing cable under its jurisdiction. Kevin Martin may not have a majority of commissioners on his side, however, and Congress has bristled at the notion of an expansion of agency power. The heart of the issue lies in whether cable is a monopoly, where market forces have little sway:

The Federal Communications Commission is scheduled to vote today on whether it will consider applying broad regulations to a cable television industry that has been largely unregulated at the federal level for more than 20 years.

FCC Chairman Kevin J. Martin is pushing the commission to take up the issue, but support among other members is uncertain and the vote is part of a crowded agenda still being assembled last night in a process one staff member called "chaotic."

Martin's proposals have provoked furious opposition from the cable industry.

A vote could begin a process resulting in a national cap on cable ownership, with no cable company allowed to have more than 30 percent of all U.S. subscribers, a ceiling that Comcast Communications is near. It could also reduce prices that cable companies could charge smaller or independent programmers to lease access on unused channels.

Martin claims that the 70/70 threshold has been met. That delineation barred FCC jurisdiction over cable until 70% of all households had access to cable service with at least 36 channels, and 70% of those had subscribed to the service. According to a study commissioned by the FCC, the 70/70 threshold was met this year, with slightly over 71% of all cable-ready households now subscribing to the service. Martin wants to move now to assert FCC authority.

What will the FCC do with cable? Much the same as it did with broadcasters -- limit ownership and impose some pricing structures. If cable was a true monopoly, this would make some sense. Where government allows monopolies, then market forces cannot exercise control over quality and cost as a free-market system would.

Is cable really a monopoly? Most homes have only one cable provider option. For instance, I use Comcast, the nation's largest cable provider, but that's because Comcast owns the delivery mechanism in my community. In that sense, Comcast is a monopoly, because I cannot contract with Time Warner or any other competitor, just as Time Warner's customers cannot contract with Comcast in their communities.

However, I do have other options. I could instead get my entertainment from DirecTV or Dish Network. My services for Internet and local phone service are bundled under Comcast, but I could opt to split them out to Verizon's wireless network (which I use anyway, for travel) and any number of local phone service options. These choices would be considerably less convenient, but they exist, and I could conceivably save money by pursuing them. If Comcast failed to deliver quality service and an economical and convenient product, I'd be tempted to do so.

The FCC should tread very lightly when assuming jurisdiction over cable. In a world with a plethora of communications sources, the agency is already edging towards being an anachronism, a by-product of an era when telecommunications required massive capital and risky return. As Martin's enthusiasm for regulation shows, the FCC has become the risk rather than protection for telecommunications investment.

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Should The FCC Regulate Cable?

The Federal Communications Commission chair has declared that the thresholds of cable penetration have exceeded the minimum necessary for FCC regulation and intends on bringing cable under its jurisdiction. Kevin Martin may not have a majority of commissioners on his side, however, and Congress has bristled at the notion of an expansion of agency power. The heart of the issue lies in whether cable is a monopoly, where market forces have little sway:

The Federal Communications Commission is scheduled to vote today on whether it will consider applying broad regulations to a cable television industry that has been largely unregulated at the federal level for more than 20 years.
FCC Chairman Kevin J. Martin is pushing the commission to take up the issue, but support among other members is uncertain and the vote is part of a crowded agenda still being assembled last night in a process one staff member called "chaotic."
Martin's proposals have provoked furious opposition from the cable industry.
A vote could begin a process resulting in a national cap on cable ownership, with no cable company allowed to have more than 30 percent of all U.S. subscribers, a ceiling that Comcast Communications is near. It could also reduce prices that cable companies could charge smaller or independent programmers to lease access on unused channels.

Martin claims that the 70/70 threshold has been met. That delineation barred FCC jurisdiction over cable until 70% of all households had access to cable service with at least 36 channels, and 70% of those had subscribed to the service. According to a study commissioned by the FCC, the 70/70 threshold was met this year, with slightly over 71% of all cable-ready households now subscribing to the service. Martin wants to move now to assert FCC authority.
What will the FCC do with cable? Much the same as it did with broadcasters -- limit ownership and impose some pricing structures. If cable was a true monopoly, this would make some sense. Where government allows monopolies, then market forces cannot exercise control over quality and cost as a free-market system would.
Is cable really a monopoly? Most homes have only one cable provider option. For instance, I use Comcast, the nation's largest cable provider, but that's because Comcast owns the delivery mechanism in my community. In that sense, Comcast is a monopoly, because I cannot contract with Time Warner or any other competitor, just as Time Warner's customers cannot contract with Comcast in their communities.
However, I do have other options. I could instead get my entertainment from DirecTV or Dish Network. My services for Internet and local phone service are bundled under Comcast, but I could opt to split them out to Verizon's wireless network (which I use anyway, for travel) and any number of local phone service options. These choices would be considerably less convenient, but they exist, and I could conceivably save money by pursuing them. If Comcast failed to deliver quality service and an economical and convenient product, I'd be tempted to do so.
The FCC should tread very lightly when assuming jurisdiction over cable. In a world with a plethora of communications sources, the agency is already edging towards being an anachronism, a by-product of an era when telecommunications required massive capital and risky return. As Martin's enthusiasm for regulation shows, the FCC has become the risk rather than protection for telecommunications investment.

About

Captain Ed is a father and grandfather living in the Twin Cities area of Minnesota, a native Californian who moved to the North Star State because of the weather. He lives with his wife Marcia, also known as the First Mate, their two dogs, and frequently watch their granddaughter Kayla, whom Captain Ed calls The Little Admiral.

My Other Blog

The Crows Nest

The Old Woman

Pat Buchanan has a new book out, Day of Reckoning, which I have not yet had a chance to review. According to Rick Moran, I needn't bother. Buchanan informs his readers that America has passed into twilight. Moran refers to Buchanan as an "old woman". Don't miss this post.

Norman Podhoretz Responds

Accused of using a manufactured quote by Andrew Sullivan, Norman Podhoretz responds rather forcefully at Commentary's blog, Contentions. Podhoretz notes that Sullivan and The Economist both seem to miss the fact that the Iranians often edit Ayatollah Ruhollah Khomeini's speeches for their own political benefit. Amir Taheri, who published the quote on which Podhoretz relied, produces the source material for the remarks by Khomeini eschewing Iranian nationalism for Islamist triumphalism. Will Sullivan apologize?

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New Pajamas Media Podcast On BlogWorld Expo!

Don't miss Pajamas Media's new XM show, PJM Political, now available for podcast and download at PJM's site. I'm one of the featured segments, as well as Glenn Reynolds, Hugh Hewitt, James Lileks, Ed Driscoll, and more. Be sure to check it out!

Captain's Quarters Makes The Finals -- Twice!

I've been honored to be named a finalist in two different categories of the 2007 Weblog Awards -- Best Blog and Best Conservative Blog! Be sure to cast your votes in all catgories, and to use the opportunity to discover some new and worthy voices ....

UPDATE: We finished in third place for Best Conservative Blog and fourth in the overall Best Blog competition. Thanks to everyone who voted for Captain's Quarters, and I hope you enjoyed a new blog or two during the effort!

Help Project Valour-IT Make Us All Winners!

The Navy team at Soldier's Angels can use your help to make everyone a winner! Donate to the Project Valour-IT fundraiser for the Navy team and help us give our wounded warriors an opportunity to shine.

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Yes, I know the Crow's Nest has mostly been moribund since the site's relaunch. I do plan on using it more often in the future, I promise. I'll be spending a little more time on these posts as a way to link out to the blogosphere. Keep an eye on this space.

Also, please note that I've put the Amazon search bar on the main page, in the right sidebar. If you want to do some shopping at Amazon -- and who doesn't? -- be sure to shop through Captain's Quarters. Amazon does pay a small percentage of the sale to me, and it helps pay for a few sundries related to the blog. Much appreciated!

OpenCongress Web Widget

Ever wanted to announce your support or opposition to Congressional legislation? OpenCongress now has a web widget that allows bloggers to do exactly that. Take a look at this, and check out how easily you can build your own.

Maybe They're Flotation Devices?

The Australian Navy foots the bill for breast augmentations. The Labour Party would like to know why, and probably so would most of the voters in Australia.

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Congrats to Fausta, who won a Thinking Blogger award. She thanks me for my friendship, but the truth is that Fausta makes it easy to be her friend. She's always positive and energetic, and she epitomizes the notion of a thinking blogger. Make sure to put her on your must-read list!

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NRSC chair Senator John Ensign calls for Democrats to return all campaign funds donated by MoveOn, after their despicable New York Times ad today accusing David Petraeus of treason. "If Senate Democrats are serious about moving our country forward, they will denounce this outrageous ad and return the campaign funds MoveOn.org has lavished on them as well as the donations made through MoveOn.org -- the choice is theirs." Ensign's right, but I wouldn't hold my breath waiting for the refund ...

Support The Al-Dura Petition

Roger Simon at Pajamas Media is circulating a petition to demand accountability for the discredited al-Dura report from France's Channel 2. This is, as Roger calls it, the "Father of all Fauxtography," and C-2 has never acknowledged its fault in airing the supposed murder of a Palestinian child. He wants C-2 to show all of the unedited footage of the incident in order to show that C-2 faked the murder. If they're resisting the demand, I'd say they have something to hide ....

There Goes The Undefeated Season

Notre Dame managed to get its first loss out of the way as soon as possible -- and as badly as possible. Georgia Tech came to South Bend and stomped the Irish, 33-3, in the worst home opener loss in school history. The offense fumbled twice and allowed seven sacks on Evan Sharpley, who must have longed to have Brady Quinn back on the field instead. If Charlie Weis doesn't turn this debacle around fast, he may want to start asking Ty Willingham for some career counseling ....

Would Early Primaries Allow More Donations?

Jim Geraghty at The Campaign Spot believes that candidates will benefit if primaries and caucuses get pushed into 2007. A loophole in campaign finance regulation appears to allow an extra $2,300 per donor for candidates if those elections are held this year. Be sure to check out Jim's analysis, and the surprising candidate that may benefit the most.

When Tom Met Jeralyn

One of the interesting aspects of politics is finding out that opponents are people, too. Jeralyn Merritt of TalkLeft met Rep. Tom Tancredo backstage at NBC's studios, and found him more likable than she had anticipated. Perhaps it was their mutual interest in Dog, The Bounty Hunter ...

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